Hong Kong plans to import electronic components from India

HONG KONG: Hong Kong, the world's eighth-largest trading economy, sees "a good possibility" of importing consumer electronic components from India and will "encourage" local companies to set up assembly plants there with the aim of bolstering economic and business ties.

Terming the potential entry as "a win-win situation", It has stressed on stepping up the programme of exchange and understanding between the two countries and signing of the Double Taxation Agreement and Investment Protection Treaty for promotion of trade and investments.

However, on the bilateral trade front, Hong Kong expects a growth in exports to India, but sees imports from India to stay flat.

"Yes, there is a good possibility (of imports) of parts and components for making consumer electronics products. Because we are the largest exporter of telephones, mobiles in world. So, we need parts for finished products," Hong Kong Trade Development Council (HKTDC) Deputy Executive Director, Raymond Yip told Indian reporters here.

"Because we also trade in products and we don't buy for our 7.3 million people here. We buy actually for 1.3 billion people in China, we buy for the world. We can buy worth $1.4 billion per day for the world."

He further said local companies in Hong Kong can also be encouraged to invest in India by setting up assembly plants to tap the big domestic market there in the wake of rising income of the middle class.

According to HKTDC, Hong Kong does not produce components itself and imports the same from China, the US, Japan, Korea, Taiwan, Malaysia. And this is where India can fit in, Raymond noted.

"India excels in making good quality telecom components because of your domestic research and development and the presence of MNCs... electronics is our biggest industry. Out of $462 billion of our exports, half is electronics," Raymond said.

"We could import that from India because you produce some good components because we need components and parts to make products for exports."

Hong Kong's total exports to the world last year stood at $462 billion while its imports remained at $518 billion.

On the 'Make In India' initiative, he said: "For us, anything which turns into business opportunities is great and of course, we want to sell more products to India."

He pointed to some constraints though in terms of import regulations, and tariff, adding that it is being liberalized.

HKTDC, established in 1966, is a statutory body dedicated to promoting Hong Kong's trade in goods and services.

Asserting that Hong Kong has "big" appetite for trade, Raymond said the country also buys products, including luxury items such as watches, for 60 million tourists comprising 45 million from China.

Stepping up his pitch further, Raymond said it is number one market in the world for Swiss watches and Japanese food products.

Several people ET spoke with about Ericsson’s India operations, including its current and former employees, said the Stockholm-based firm has reduced headcount in the last one year or so across functions, in line with its global restructuring.